The phenomenon of the ‘side hustle’ has experienced a monumental rise in popularity in the UK over the past few years. The term, simply referring to having a second source of income on the side of a regular full-time job, brings over £70 billion to the UK economy each year according to Henley Business School. Incredibly, with around 25% of Brits now thought to be giving their own side hustle a try, this figure could well be on the rise.
Here at Caunce O’Hara, this got us thinking about just why these spare-time businesses have become appealing of late, what hidden issues may arise from them and what protection, if any, so-called ‘side hustlers’ are putting in place in order to protect themselves financially. To find out more, we decided to survey 1,000 part-time entrepreneurs to get a better understanding of their motives, plans and preparation. Here’s what we found.
While our survey suggests that the group of people setting up side hustles contains a wide and diverse range of individuals, 33% of the entrepreneurs we spoke to were aged between 35 and 44. Unsurprisingly, especially when you consider the rise of working from home and the impact of the COVID-19 pandemic, just under a quarter (23%) of all side hustlers we questioned stated that their business has been set up in the past 12 months, with a further 40% saying that their side hustle is only between one and five years old.
The survey also found that 34% of respondents have one business running on the side of their full-time job. It was interesting to note that a significant 66% had multiple side hustles, ranging from two to more than four. With regard to motivations for starting their side hustle, 37% of respondents stated the main reason was to simply make more money. Other top reasons listed included, ‘in order to follow a passion’, ‘to fill spare time’ and due to ‘a dislike of their full-time job’.
Setting up a side-business can be a hugely rewarding and exciting venture and it can help to have expert knowledge on hand to navigate both operational and legal matters. The Markel Law Hub (included as standard with Caunce O’Hara legal expenses insurance) provides access to 1,200 DIY legal templates for business, and includes a number of guides on starting your business – find out more here.
For those with no experience of side hustles, knowing exactly how much money can be made may well be the first thing you’re interested to learn. Well, according to our respondents, there are certainly healthy profits to be made. While almost a third (29%) of those we quizzed told us they make less than £500 per month from their second business, 59% claim to be earning between £600 and £2,500 monthly. Perhaps surprisingly, 12% of respondents revealed they make a side hustle monthly profit of over £2,500.
The survey also revealed a range of sectors side hustlers operate in, with the most popular named as retail (including crafts/textiles), marketing services, research, finance (including trading) and content creation (such as writing and blogging).
When it comes to the amount of time respondents spend on their side business, 26% said they put aside between 6 and 10 hours each week for their side hustle, while 33% said they spend between 11 and 20 hours weekly and 9% invest more than 20 hours each week working on their side hustle.
Aside from the variation in the amount of hours spent on their side hustles, the preferred time of day to get this work done also differed greatly. ‘After work’ is seemingly the most popular time to spend on side business work, according to our respondents, with 55% choosing this option, while 38% said they prefer to work on their side businesses before going to their full-time job.
Interestingly, 36% of those questioned admitted to spending time on their side hustle while at work. Whilst many employers are unlikely to take issue with staff working on a side business during their lunch hour, side hustlers could face a tricky conversation with their employer if they are considered not to be focusing all their efforts on their full time job.
When asked about their long-term goals regarding their side hustles, there was a fairly balanced mix of responses. Over a quarter of respondents (27%) said that they hope their side hustle can eventually become their main source of income, allowing them to quit their full-time job to focus solely on this work. This would appear to coincide with the so-called ‘Great Resignation’ whereby significant numbers of workers are planning to change jobs having re-evaluated priorities around life and work during the pandemic. For side-hustlers looking to make the move into full-time business owner, take a look at our guide to becoming a self-employed business owner.
However, it’s interesting to note that 38% admitted they want things to stay the way they are, and a further 21% said that they only run their side hustle as a hobby.
Intriguingly, 25% respondents had officially registered their side hustle as a limited company, with the remainder opting to trade as a sole trader or partnership. It’s important to consider the steps to take in changing from a sole trader or partnership to limited company, and it’s worth reading the Markel Law Hub’s how to set up a private limited company guide for a simple overview of what’s involved.
Just as there is a spectrum of differing ambitions among the side hustlers we surveyed, it would appear that the obstacles each part-time entrepreneur experiences also vary. 16% felt that simply not having enough time was the biggest hurdle to running their side hustle, whilst others reported being hamstrung by being unable to strike a good work-life balance (12%). Meanwhile, a combined 24% of respondents said they find marketing their brand and finding new clients the biggest challenges. Only 8% revealed that they have not experienced any obstacles so far and that they find it easy to run their side hustles.
These challenges, whilst being part of the journey of building a business, can seem difficult to overcome. For help, take a look at our articles on maximising productivity, tips for marketing your business, as well as mentalhealth.org.uk’s guide to achieving a work-life balance.
Many side hustlers we spoke to revealed that they have not taken out any business insurance policies, with 43% being uninsured. When asked why they had not taken out any form of insurance connected to their side hustle, 47% believed they did not earn enough to require it. Worryingly, however, a quarter (25%) of respondents revealed that they don’t know how to purchase insurance of this kind, while a further 28% said they either didn’t know they needed insurance or that this kind of business cover even existed.
The findings suggest a lack of awareness of the importance of insuring side-businesses; as a specialist business insurer, we’ve seen claims made against businesses of all sizes and without the right cover in place, part-time entrepreneurs run the risk of being left with a hefty bill for legal fees (and potentially compensation payments) in the event of a claim. For help arranging insurance for your business, including the covers you should consider, read our guide to insurance for startups or get an online quote in minutes.
So, there you have it – a brief look into the emerging world of side hustlers. With the rise of spare-time business owners and ‘from-home entrepreneurs’ showing no signs of slowing, it appears the way small enterprises operate in the UK may have changed forever. With this change has come the need for specialist business insurance policies. At Caunce O’Hara, we are here to do just that – provide industry-specific cover for large and small businesses alike.
Do you run your own side hustle? If you do, let us know how you find the time to run to, what challenges you face, and what business insurance policies work best for you. Simply join the conversation on social media using #SideHustlers.
All quoted survey figures are based on the results of an independent survey of 1,000 respondents conducted in October 2021.